Why is list price versus sales price such an important number to know and master in your market?
Here's the answer:
Buyers and sellers need to understand that when they're making or accepting offers, this number will have impact. And I'll give you an example:
Every buyer wants to get a great deal, right? Every buyer wants to feel like they're beating the market. So when we sit with a buyer, we need to educate them about what's happening in the marketplace. For instance, in my market today, sellers are receiving on average 99% of list price. Some are getting much more — they're getting 105% or 106% of list price. But the average in our market is 99%.
So with a buyer, what I'll say to them at the beginning of the relationship is:
"Hey, you know, many homes sell for full price in our current market, or even over full price. But the average is 99%. The key is to see how aggressively the sellers price their home compared to other listings in the area. The more aggressive they are on price, the more offers and showings they'll receive and the higher they'll go over full price."
So now I'm educating them that some buyers price based on what I call "Frenzy Pricing." They actually underprice the property and then drive people over the full price. And that's a common strategy today.
Now sellers are tending to get a little bit greedy right now and you need to have a script for that. How do you deal with a greedy seller? Well sellers, like all human beings, want to feel like they win. And they want to feel like they've one-upped the market, right? They want to feel like they left nothing on the table.
And there's a study that was done about wealth in the world. And the question was does wealth make you happier? And the answer, according to a study of 16 different countries, all kinds of ethnicity, all kinds of economic, socio status, the answer universally was yes.
Wealth does make you happier, but it's not what you think. Here's what they meant:
The people being interviewed just wanted to be a little bit wealthier than their neighbor. They didn't need to be super wealthy, just a little bit more than their neighbor. And that makes them feel really good.
That's the same with every seller in the marketplace. That's why this number is so powerful. When you say to the seller:
"Hey, we received an offer at 101% of list price. That's two full points over what's average sellers are receiving in this market, great job."
Now you're stroking their ego. They beat their neighbor, which is what's most important. Frame it up like that. Don't frame it up any other way. Frame it up that they just won the market and you will be a winner.
So if you want some more ideas like this, and want to get more listings, have more buyers, and receive more referrals, check out The Path Performance Coaching Platform at https://erealestatecoach.com and start your free two-week trial.
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